Table of Contents

Executive Summary

The Committee on Data and Research for Policy on Illegal Drugs was formed in early 1998 in response to a request from the Office of National Drug Control Policy (ONDCP) of the Executive Office of the President to study the data and research needed for national policy on illegal drugs. The committee's first task, the subject of this report, was to assess two recent cost-effectiveness studies on cocaine control policy: one by RAND, Controlling Cocaine: Supply Versus Demand Programs (Rydell and Everingham, 1994), prepared for ONDCP and the U.S. Army, and one by the Institute for Defense Analyses (IDA), An Empirical Examination of Counterdrug Interdiction Program Effectiveness (Crane, Rivolo, and Comfort, 1997), prepared for the Deputy Assistant Secretary of Defense, Drug Enforcement Policy and Support, U.S. Department of Defense. The committee examined the assumptions, data, methods, and findings of the RAND and IDA studies.

The RAND study is best thought of as conceptual research offering a coherent way to think about the cocaine problem. The study documents a significant effort to identify and model important elements of the market for cocaine. It represents a serious attempt to formally characterize the complex interaction of producers and users and the subtle process through which alternative cocaine control policies may affect consumption and prices. The study establishes an important point of departure for the development of richer models of the market for cocaine and for empirical research applying such models to evaluate alternative policies.

However, the RAND study does not yield usable empirical findings on the relative cost-effectiveness of alternative policies in reducing co-

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Executive Summary
The Committee on Data and Research for Policy on Illegal Drugs was formed in early 1998 in response to a request from the Office of National Drug Control Policy (ONDCP) of the Executive Office of the President to study the data and research needed for national policy on illegal drugs. The committee's first task, the subject of this report, was to assess two recent cost-effectiveness studies on cocaine control policy: one by RAND, Controlling Cocaine: Supply Versus Demand Programs (Rydell and Everingham, 1994), prepared for ONDCP and the U.S. Army, and one by the Institute for Defense Analyses (IDA), An Empirical Examination of Counterdrug Interdiction Program Effectiveness (Crane, Rivolo, and Comfort, 1997), prepared for the Deputy Assistant Secretary of Defense, Drug Enforcement Policy and Support, U.S. Department of Defense. The committee examined the assumptions, data, methods, and findings of the RAND and IDA studies.
The RAND study is best thought of as conceptual research offering a coherent way to think about the cocaine problem. The study documents a significant effort to identify and model important elements of the market for cocaine. It represents a serious attempt to formally characterize the complex interaction of producers and users and the subtle process through which alternative cocaine control policies may affect consumption and prices. The study establishes an important point of departure for the development of richer models of the market for cocaine and for empirical research applying such models to evaluate alternative policies.
However, the RAND study does not yield usable empirical findings on the relative cost-effectiveness of alternative policies in reducing co-

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caine consumption. The study makes many unsubstantiated assumptions about the processes through which cocaine is produced, distributed, and consumed. Plausible changes in these assumptions can change not only the quantitative findings reported, but also the main qualitative conclusions of the study. Hence the study's findings do not constitute a persuasive basis for the formation of cocaine control policy.
The IDA study is best thought of as a descriptive time-series analysis of statistics relevant to analysis of the market for cocaine in the United States. The study makes a useful contribution by displaying a wealth of empirical time-series evidence on cocaine prices, purity, and use since 1980. Efforts to understand the operation of the market for cocaine must be cognizant of the empirical data. The IDA study presents many of those data and calls attention to some intriguing empirical associations among the various series.
However, the IDA study does not yield useful empirical findings on the cost-effectiveness of interdiction policies to reduce cocaine consumption. Major concerns about data and methods make it impossible to accept the IDA findings as a basis for the assessment of interdiction policies. Numerous problems diminish the credibility of the cocaine price series developed in the study, and an absence of information prevents assessment of the procedure for selecting interdiction events. The conclusions drawn from these data rest on the assumption that all time-series deviations in cocaine price from an exponential decay path should be attributed to interdiction events, not to other forces acting on the market for cocaine. This foundation is too fragile to support the study's conclusions or to serve as a basis for policy.
The process of scrutinizing the specifics of the RAND and IDA studies has helped the committee to frame the questions that it will now address in a broad study of how data and research may, in the future, better serve the objective of informing drug control policy.

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